“Personal Integrity Matters. I Never Went to Investing School. I Never Managed a Big Fund. But I Was the First Person to Work Up the Courage to “Cross” John Greaney By Posting Honestly on Safe Withdrawal Rates. And I Was the First Person to Call Out Mel Linduaer on His B.S. Abusive Posting Tactics at the Bogleheads Forum. That Makes Me Ten Times the Investing Expert That Jack Bogle or Bill Bernstein or Larry Swedroe or Scott Burns Can Ever Again Claim to Be Now That They Have Failed to Take Prompt Action re These Matters.”

Set forth below is the text of a comment that I recently posted to another blog entry at this site:

When people like this, they see two things. First, they know you are not credible because what you call “buy and hold” has been very successful and is not how your portray it. Secondly, they see you as a crackpot when you throw around threats of prison. It makes you come off like a little child having silly revenge fantasies.

People do not respond well to those sorts of statements, Anonymous. You don’t have to convince me of this. I have seen the reality play out before my eyes on thousands of occasions.

Did you see the demonstrations that were held by hundreds of students at Penn State when the truth about Joe Paterno came out? Those students LOVE Joe Paterno. And not without reason. He is one of the greatest coaches who ever lived. The bad things he did do not cancel out his many genuine accomplishments.

Do you think that people helped Paterno by covering up what was going on around him for so many years? There was a woman who worked at Penn State who asked that action be taken and she was fired for her trouble. That solved the problem TEMPORARILY. But of course in the long term it made it worse.

That woman was the true Joe Paterno fan, in my assessment. She tried to bring a quick end to something that was in the process of destroying his reputation. I am to Jack Bogle what that woman was to Joe Paterno. I love the guy. That’s why I speak up when I see financial fraud being practiced at a board with his name on it.

It takes more guts to speak up than it takes to be a yes man. Another way of saying it is to say that it takes more love to speak up than it does to be a yes man. I love Jack Bogle more than you do. You talk the talk. I walk the walk.

That woman was fired. People didn’t like what she said. But she has a clear conscience today. She is able to look at the woman in the mirror and feel good about what she sees.

I get it that telling the truth about how stock investing works is not the popular thing to do today, when we are priced for a 65 percent price crash sometime over the next year or two or three. The reality is that we are going to need someone to put the pieces together after that crash and to get the job done that person is going to need a reputation for integrity. I think it would be feel to say that the “experts” who failed to speak out about you Goons when they learned what you are up to will not be viewed as possessing the personal integrity needed to help us dig out of the hole that the Buy-and-Holders put us in. I will.

Personal integrity matters, Anonymous. It matters a lot. I never went to Investing School. I never managed a big mutual fund. But I was the first person to work up the courage to “cross” John Greaney by posting honestly on safe withdrawal rates. And I was the first person to call out Mel Lindauer on his b.s. abusive posting tactics at the Bogleheads Forum. And that makes me ten times the investing expert that Jack Bogle or Bill Bernstein or Larry Swedroe or Scott Burns can ever again claim to be now that they have failed to take prompt action re these matters.

We all are presented opportunities to act or not act. I acted. They did not. That one is now written in the books and it obviously can never be unwritten.

A new page of the book is being written today. Jack or Bill or Larry or Scott can elect to act today. If one of them does, I will be writing it up at my blog tomorrow. I will be praising that person to the skies. It will make me happy to do so once it becomes possible to do so HONESTLY.

I cannot do that today, can I? Whose fault is that? I have figured out how to get my words posted to the internet. Does Jack lack that ability? Jack Bogle hasn’t called Mel Linduaer out on his b.s. abusive posting tactics because he fears what Linduaer will do to him if he does so. That’s the most charitable explanation of Jack’s behavior that any of his friends can possibly put forward on his behalf. That reality will change when my good friend Jack works up the courage to take the steps needed to make it change. I can try to steer him in the right direction. I cannot force him to take the steps recommended.

An investing expert who is afraid to post honestly re the numbers that millions of people have used to plan their retirements is a piss-poor investing expert. People need to know that Jack Bogle is today a piss-poor investing expert. It’s a reality that affects every one of us suffering the effects of today’s economic crisis and worrying over the worsening of that economic crisis that we will experience when the next price crash sends us all down deeper into the Buy-and-Hold darkness.

My best and warmest wishes to you (and to my good friend Jack).

Rob

Comments

  1. Anonymous says

    Rob,

    You live in a jaded world in which you will no longer listen to common sense. Your hatred clouds everything. I would back John and Mel any day of the week before you.

  2. Rob says

    I see it just the other way around, Anonymous.

    I feel that the millions of middle-class investors whose lives are in the process of being destroyed have every right in the world to hear about the peer-reviewed research that shows them how to reduce the risk of stock investing by 70 percent and to retire five to ten years sooner than they ever before imagined possible.

    I guess that’s why God made ice cream in both chocolate and vanilla, no?

    My best and warmest wishes to you in any event, old friend.

    Rob

  3. Anonymous says

    There are many PROVEN and tested strategies that have worked for many. We have long term data with these strategies being utilized. We have seen time after time how market timing has failed because emotion gets in the way. You can talk all you want about your strategy, Rob, but it hasn’t even been utilized. Even you don’t really following it.

    What I know for a fact is if I had followed your advice, I would not be as well off as I am today. All you can say is how YOU think the market will crash to help evn out the score.

  4. Rob says

    My intent is to continue posting honestly re what the last 33 years of peer-reviewed research reveals to us about how stock investing works in the real world, Anonymous.

    I naturally wish you the best of luck in all your future endeavors, my old friend.

    Rob

  5. Anonymous says

    This is like you ask your child what he accomplished in school this year, and he replies: “I got in some fights, and eventually I got expelled. That makes me much better than those students that studied hard”.

  6. Rob says

    It’s more like getting expelled from the Mafia because you weren’t willing to shoot your best friend in the head, Anonymous.

    I built the Retire Early board at Motley Fool into the most successful board in that site’s history. The people who posted there became my friends. Greaney pushed his retirement study relentlessly. He destroyed the lives of thousands of good people.

    I am proud that I worked up the courage to stand up to him and his Goon Squad.

    No apologies whatsoever.

    I wish you all good things.

    Rob

  7. Anonymous says

    Name just one person destroyed by John.

    To the opposite, I can show how I would be worse off following you

  8. Tron says

    So Rob,

    I am 28 have about 200k in assets between my 401k and a ROTH IRA. I’m currently at about a 80/20 stock to bond split maxing out my tax advantage space with the 80/20 allocation. What would be your suggestion? To put all this money in money market fund until a significant crash brings PE/10 ratio much lower?

  9. Rob says

    You cannot show that even one person is worse off by following Valuation-Informed Indexing, Anonymous. The Bennett/Pfau research showed that there has never in the history of the U.S. market (we have 140 years of historical returns available to us for review) been a single case in which the pure Get Rich Quick approach has beat the research-based approach in the long run.

    Every community members who was taken in by John’s wildly inaccurate claims was hurt. You are going to jump up and down and say that we haven’t seen the next price crash yet and so there is some mystical, magical way in which it can be argued that he hasn’t destroyed those people’s lives as of today. I am not impressed. Everything I say is rooted in a premise that the stock market will continue to perform in the future at least somewhat as it always has in the past. I obviously am not able to use peer-reviewed research to make claims about what will work in the future in the event that this becomes the first time in recorded history when everything is turned upside down and a pure Get Rich Quick approach ends up working for one or two long-term investors.

    Please remember that your trial will be taking place AFTER the next price crash, Anonymous. Every jury member will have seen the millions of middle-class lives destroyed with their own eyes. I doubt very much that your word games will impress any of the people sitting on your jury.

    That said, I naturally extend my best and warmest wishes to you and yours.

    Rob

  10. Rob says

    To put all this money in money market fund until a significant crash brings PE/10 ratio much lower?

    I wouldn’t advise that, Tron.

    But I certainly wouldn’t encourage you to stick with an 80 percent stock allocation, no matter what tax benefits there are to it.

    Have you ever considered any non-extreme possibilities?

    I would give those some thought.

    Rob

  11. Anonymous says

    It’s more like getting expelled from the Mafia because you weren’t willing to shoot your best friend in the head, Anonymous.

    What you call the mafia, the rest of the world calls “civilized society”. And that society is discussing valuations and other matters everyday all over the internet. Behave in a respectful way, and you can join in.

  12. Rob says

    Any society that perceives an effort to get errors in retirement studies corrected as “disrespectful” is a society that I want to change, Anonymous.

    There was a time when there were many good and smart people who thought that a pure Get Rich Quick strategy might work out for one or two long-term investors. Those days are long gone. There is now 33 years of peer-reviewed research showing that Buy-and-Hold is always a loser in the long run.

    The society that I love has adopted laws making financial fraud a felony. So when it comes to putting up posts in “defense” of Mel Linduaer and John Greaney (and my good friend Jack Bogle?), I am afraid that you are going to have to try to find someone else.

    All that said, please know that I extend my best and warmest wishes to you.

    Rob

  13. Rob says

    What you call the mafia, the rest of the world calls “civilized society”.

    We’ll see what the millions of middle-class people whose lives are in the process of being destroyed called the “society” built by the Wall Street Con Men following the next price crash, Anonymous.

    Hang in there.

    Rob

  14. Rob says

    And that society is discussing valuations and other matters everyday all over the internet.

    Dishonestly, to be sure.

    But still….

    Rob

  15. Anonymous says

    Rob,

    Show me one person who is following your strategy and what their return rates and expenses have been.

    Also, show me one person hurt by John.

  16. Rob says

    The Bennett/Pfau research shows the results for 140 years, Anonymous.

    No one is saying that there were real, live human beings following Valuation-Informed Indexing strategies all those years. Shiller published his breakthrough research that showed how stock investing works in 1981. Wade and I followed up with the research showing how the theory worked in practice over 140 years in 2011.

    If there weren’t a Ban on Honest Posting in effect, the Bennett/Pfau research would have been written up on the front page of the New York Time shortly after it was published and every investing professional would be advocating Valuation-Informed Indexing today. There obviously will no longer be any Buy-and-Hold advocates once we permit honest posting. Why would anyone advocate a strategy that has failed for 140 years running?

    Every person who has has been affected in any way by the economic crisis was hurt by John Greaney’s 12-year Campaign of Terror against our board and blog communities and against the way of life that we have followed and enjoyed in the United States for several hundred years now. If as a society we approved of financial fraud, we obviously would not have adopted laws making it a felony. Give me a friggin’ break.

    Don’t let the bad guy get you down, man.

    Rob

  17. Anonymous says

    So you can’t show one person with results using your strategy and you can’t show one person hurt by John, yet you want us to believe what you say without any proof.

    Give me a friggin’ break!

  18. Anonymous says

    We’ll see what the millions of middle-class people whose lives are in the process of being destroyed called the “society” built by the Wall Street Con Men following the next price crash

    The one that’s going to happen before the end of 2015, assuming your model of the world is correct, right?

    We just had a 50% crash…people seem to be exactly where they were before.

  19. Rob says

    My expectation, based on the last 33 years of peer-reviewed research in this field (which in turn is based on the 140 years of historical return data available to us today) is that we will see the crash before the end of Obama’s presidency.

    I wish you well, Anonymous.

    Rob

  20. Tron says

    “I wouldn’t advise that, Tron.

    But I certainly wouldn’t encourage you to stick with an 80 percent stock allocation, no matter what tax benefits there are to it.

    Have you ever considered any non-extreme possibilities?”

    Most people wouldn’t consider a 80% stock allocation extreme for a 28 year old. I am honestly asking what you would recommend based on your VII system. I don’t get why you are incapable of laying out hard principles with regards to VII. It is always just vague nonsense replies such as “its like buying a sweater” or “doing something less extreme”. No one is willing to follow an investing strategy that can’t be defined clearly. Additionally it can’t be back tested because there are no guidelines.

  21. Rob says

    There are some things that can be backtested and there are some things that cannot be backtested. That’s true both with Buy-and-Hold and with Valuation-Informed Indexing.

    Bogle says that an investor’s risk tolerance must be taken into consideration when he sets his stock allocation. But there is no way to backtest that. Most investors don’t even know their risk tolerance. Some who say they have a high risk tolerance really have a low risk tolerance. Some who say they have a low risk tolerance really have a high risk tolerance.

    That doesn’t make Bogle wrong. He is right that risk tolerance should be taken into consideration. There is just no good way to backtest it.

    It’s the same with Valuation-Informed Indexing. The only difference between Valuation-Informed Indexing and Buy-and-Hold is that Valuation-Informed Indexers take valuations into consideration. You can backtest that. Wade Pfau and I did so in the peer-reviewed research that we co-authored. The research shows that by taking valuations into consideration you always increase your long-term return dramatically while also dramatically reducing risk. On every aspect of VII that can be backtested, VII beats BH by a country mile. There’s just no comparison.

    But it is no more possible to backtest every aspect of the VII experience than it is to backtest every aspect of the BH experience. Test VII by the standards used to test BH and the result will always come out the same — VII is far superior in every possible way. Play stupid word games and you will naturally go around and around in circles and never make the slightest bit of progress.

    If you want to invest effectively, the research you need to do so is available to you, Tron.

    If you want to avoid ever having to acknowledge having made a mistake, you are stuck with Buy-and-Hold, which was developed in a time-period when we had not yet achieved any of the many major advances that we have achieved over the past 33 years.

    If as a society we had elected in 1981 to demand that no further advances be achieved in the computer gaming field, the hottest game on the market today would be “Pong.”

    Some of us have gone far, far, far beyond “Pong” in the investing advice field. And some of us are too filled with phony pride to acknowledge that we did not know every last thing there was to know about stock investing in 1981.

    Hence the economic crisis.

    My best wishes to you, Tron.

    Rob

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